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DALLAS--AT&T (NYSE: T) says that in order to keep up with the demand of non-traditional traffic sources, the service provider took a page from the web-based companies by taking what it calls a top-down network building approach--with software at its core.

Speaking to attendees at the TIA 2015 Network of the Future event, Andre Fuetsch, senior VP of architecture and design for AT&T, said that the demand curve that's driving AT&T's need to put more software in its network is the ongoing growth of video streaming. This market will place demands the company has never had to deal with before.

"Analysts are telling us we'll see another order of magnitude increase, or 10X increase, in the next five years, and that's a lot to deal with," Fuetsch said. "We all know it's coming from streaming, a lot of it is video-based, and a lot of it will be the Internet of Things, so there is a tremendous challenge upon us in how to respond to these demands."

In the past, network capacity planning for events like Mother's Day, which is the busiest calling day of the year for all telcos, was a fairly predictable event for network engineers to plan for.

However, the Mother's Day event was predicated on dealing with just one service: traditional plain old voice service--one that's become a very small part of AT&T's overall traffic mix.

"When we were predominantly a voice service provider, the capacity engineer only worried about one day out of the year, which was Mother's Day," Fuetsch said. "Pretty much if you could engineer for Mother's Day it was pretty predictable: mothers on the East Coast are going to get calls earlier than mothers on the West Coast. So if you made it through that day you were all set for the rest of the year."

But now, traffic capacity planning for AT&T and other large telcos is all about planning for the unexpected traffic bursts caused by users viewing the latest celebrity videos online.

"If you look at this demand curve now, voice traffic is a trickle," Feutsch said. "Now the traffic capacity engineer has to worry about the latest Kardashian streaming video, who has been watching House of Cards. And the biggest event we worry about is when Apple releases their next big iOS upgrade because you never know who is going to push the button to download now. So events like that really add a lot of volatility and unpredictability to our network."

To stay on pace with these unpredictable demands, the current hardware-based network approach won't suffice. A software-centric approach will help AT&T deal with these network spikes, Feutsch said.

Being a traditional telco, AT&T has built a network over the last century that was based mainly on hardware. In this approach, the service provider would build a network with all of the elements from the bottom with five nines reliability, redundancy and scale. The telco has now adopted a top down approach that has been the hallmark of web-based companies.

"We're taking a page out of the web industry and what we found is how these web companies had to scale their avalanches and floods, they have taken a very different approach than what we traditionally have done," Fuetsch said. "We have always taken a bottoms-up approach when it comes to building products and services that are highly resilient and high performing by building a foundation on a solid foundation of five nines reliability with dedicated, customized hardware with intricate, scaleable architectures."

Unlike the telcos, web-based companies did not have the money or time to build a bottom-up network architecture. AT&T wants to adopt a similar strategy where it will build a network, applications and services in a software-centric approach.

"The web guys did it completely opposite and took a top-down approach," Fuetsch said. "They could not afford, nor did they have the time to build and procure expensive hardware technologies because they did it all in software, so they built resiliency and performance in software and took advantage of [a] virtualized layer of cheap hardware underneath."

Signs of this transition are being seen in certain areas of AT&T's network.

Leveraging a mix of software definable networking (SDN) and network functions virtualization (NFV), the service provider is applying the software-based elements to new customer facing services like its on-demand Ethernet offering.

In April, AT&T announced that it expanded its switched Ethernet service with its Network on Demand capability to over 100 U.S. cities. Businesses can use this capability by going to an online portal to order additional ports, add or change services, or increase bandwidth to accommodate fluctuating needs and manage their networks.

"One of the first implementations that will be using this AT&T integrated cloud is our Network on Demand function," Fuetsch said. "This is basically the first SDN-based service that we now recently opened up in more than 100 U.S. cities that gives enterprise customers the ability to dynamically control the bandwidth they need between their sites."

Out of all of the major telcos, AT&T has set possibly the most ambitious software-centric goals for its network: virtualize software control to 75 percent of network by the year 2020.

Already, it's making progress toward that goal, announcing earlier this year that it is close to reaching 5 percent of the 75 percent goal. In 2016, the software transition progress will continue to ramp.

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